4 years ago on my first morning as an instructor at White Waltham the CFI (a top bloke
) took me for a familiarisation flight in the local area. It was very useful, as whilst I had flown through the area I had never operated out of it. All the local reporting points and landmarks were identified which gave me confidence for my first local lesson that afternoon. Granted I was not a new FI, as I'd been doing it part time for almost 2 years in deepest Essex and Kent, but it was very useful nonetheless.
New instructors need mentoring and guidance which a good school should provide, especially one located near the Heathrow zone or LTMA.
Having said all this, an instructor is a commercial pilot and must know his/her job, privileges and responsibilities. This unfortunate incident was probably caused by weak training of the instructor and/or a lack of assertiveness on his part.
You are the aircraft commander, take control!